Visa charges set to rise with introduction of credit card fees

Credit card charges are expected to be introduced from 22 March 2014 by DIBP on all its fees and charges. RMAs should properly adjust their costing disclosures to clients to reflect the expected price increase noting that the RBA allows for ‘reasonable costs’ to be recovered.
In aligning itself to commercial practice and improve its bottomline, DIBP has decided to recover credit card merchant fees from clients by adding a surcharge on credit card payments for all payments to DIBP. The surcharge could boost DIBPs bottomline by $14 million a year.
DIBPs financial statements indicate that despite a revenue of about 1.48 billion in FYE 2012-2013, its expenses, which largely come from border protection spending, led to a deficit of about $94 million for the year.
DIBP has not provided any indication of what the additional charges will be. Commercial operations charges vary widely and may range between 1.5% and 3% (sometimes even more). However, government agencies’ rates are generally half of that range. For instances, currently the Australian Tax Office (ATO) charges credit card merchant fees for payments at the rate of 0.42% for Visa and MasterCard payments and 1.45% for payments by American Express cards. DIBP is expected to announce its rates soon.
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